FAC Explorer

Audit 318321

FY End
2022-12-31
Total Expended
$5.41M
Findings
6
Programs
3
Organization: Houston Business Development INC (TX)
Year: 2022 Accepted: 2024-08-30
Auditor: Hrss LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
485539 2022-001 Significant Deficiency Yes L
485540 2022-002 Significant Deficiency Yes L
485541 2022-003 Significant Deficiency Yes L
1061981 2022-001 Significant Deficiency Yes L
1061982 2022-002 Significant Deficiency Yes L
1061983 2022-003 Significant Deficiency Yes L

Programs

ALN Program Spent Major Findings
14.218 Community Development Block Grants/entitlement Grants $4.28M Yes 1
21.024 Community Development Financial Institutions Rapid Response Program (cdfi Rrp) $1.12M Yes 1
21.019 Coronavirus Relief Fund $5,323 - 1

Contacts

Name Title Type
E7J4V89LZWE7 Marlon Mitchell Auditee
8323682979 Aamir Maniar Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 – BASIS OF PRESENTATION Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awards activity of Houston Business Development, Inc. (“HBDi” or the “Organization”) under programs of the federal governments for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, change in net assets, or cash flows of the Organization. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract. Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to HBDi, they are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities. Expenditures included on the Schedule may differ from amounts reflected in the financial reports submitted to the grant awarding or pass-through entities because of the following reasons: 1. Program administration fees received by HBDi from the grant awarding agency may not have been included in the program financial reports submitted to the awarding agency even though included as part of program expenses on the Schedule. 2. Differences may exist between grant periods and HBDi’s accounting period. Federal grants require the fulfillment of certain conditions set forth in grant agreements, and may be regularly monitored and reviewed by grantors, both during and after the programs. Failure to satisfy the requirements of contract agreements could result in disallowed costs and return of funds to grantors. De Minimis Rate Used: N Rate Explanation: Auditee did not elect to use the 10% de minimis cost rate. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awards activity of Houston Business Development, Inc. (“HBDi” or the “Organization”) under programs of the federal governments for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, change in net assets, or cash flows of the Organization.
Title: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awards activity of Houston Business Development, Inc. (“HBDi” or the “Organization”) under programs of the federal governments for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, change in net assets, or cash flows of the Organization. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract. Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to HBDi, they are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities. Expenditures included on the Schedule may differ from amounts reflected in the financial reports submitted to the grant awarding or pass-through entities because of the following reasons: 1. Program administration fees received by HBDi from the grant awarding agency may not have been included in the program financial reports submitted to the awarding agency even though included as part of program expenses on the Schedule. 2. Differences may exist between grant periods and HBDi’s accounting period. Federal grants require the fulfillment of certain conditions set forth in grant agreements, and may be regularly monitored and reviewed by grantors, both during and after the programs. Failure to satisfy the requirements of contract agreements could result in disallowed costs and return of funds to grantors. De Minimis Rate Used: N Rate Explanation: Auditee did not elect to use the 10% de minimis cost rate. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract. Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to HBDi, they are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities.
Title: NOTE 3 – INDIRECT COST RATE Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awards activity of Houston Business Development, Inc. (“HBDi” or the “Organization”) under programs of the federal governments for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, change in net assets, or cash flows of the Organization. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract. Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to HBDi, they are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities. Expenditures included on the Schedule may differ from amounts reflected in the financial reports submitted to the grant awarding or pass-through entities because of the following reasons: 1. Program administration fees received by HBDi from the grant awarding agency may not have been included in the program financial reports submitted to the awarding agency even though included as part of program expenses on the Schedule. 2. Differences may exist between grant periods and HBDi’s accounting period. Federal grants require the fulfillment of certain conditions set forth in grant agreements, and may be regularly monitored and reviewed by grantors, both during and after the programs. Failure to satisfy the requirements of contract agreements could result in disallowed costs and return of funds to grantors. De Minimis Rate Used: N Rate Explanation: Auditee did not elect to use the 10% de minimis cost rate. The Organization has not elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance for the year ended December 31, 2022.
Title: NOTE 4 – RELATIONSHIP OF THE SCHEDULE TO FINANCIAL REPORTS SUBMITTED TO GRANT AWARDING AGENCIES Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awards activity of Houston Business Development, Inc. (“HBDi” or the “Organization”) under programs of the federal governments for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, change in net assets, or cash flows of the Organization. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract. Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to HBDi, they are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities. Expenditures included on the Schedule may differ from amounts reflected in the financial reports submitted to the grant awarding or pass-through entities because of the following reasons: 1. Program administration fees received by HBDi from the grant awarding agency may not have been included in the program financial reports submitted to the awarding agency even though included as part of program expenses on the Schedule. 2. Differences may exist between grant periods and HBDi’s accounting period. Federal grants require the fulfillment of certain conditions set forth in grant agreements, and may be regularly monitored and reviewed by grantors, both during and after the programs. Failure to satisfy the requirements of contract agreements could result in disallowed costs and return of funds to grantors. De Minimis Rate Used: N Rate Explanation: Auditee did not elect to use the 10% de minimis cost rate. Expenditures included on the Schedule may differ from amounts reflected in the financial reports submitted to the grant awarding or pass-through entities because of the following reasons: 1. Program administration fees received by HBDi from the grant awarding agency may not have been included in the program financial reports submitted to the awarding agency even though included as part of program expenses on the Schedule. 2. Differences may exist between grant periods and HBDi’s accounting period.
Title: NOTE 5 – CONTINGENCIES Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awards activity of Houston Business Development, Inc. (“HBDi” or the “Organization”) under programs of the federal governments for the year ended December 31, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, change in net assets, or cash flows of the Organization. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the federal Uniform Guidance, wherein certain types of expenditures are not allowable or are limited by the award contract. Federal grant funds are considered earned to the extent of qualifying expenditures made under the provisions of the grants. When such funds are advanced to HBDi, they are recorded as refundable advances until earned. Otherwise, federal grant funds are received on a cost reimbursement basis from the federal program pass-through entities. Expenditures included on the Schedule may differ from amounts reflected in the financial reports submitted to the grant awarding or pass-through entities because of the following reasons: 1. Program administration fees received by HBDi from the grant awarding agency may not have been included in the program financial reports submitted to the awarding agency even though included as part of program expenses on the Schedule. 2. Differences may exist between grant periods and HBDi’s accounting period. Federal grants require the fulfillment of certain conditions set forth in grant agreements, and may be regularly monitored and reviewed by grantors, both during and after the programs. Failure to satisfy the requirements of contract agreements could result in disallowed costs and return of funds to grantors. De Minimis Rate Used: N Rate Explanation: Auditee did not elect to use the 10% de minimis cost rate. Federal grants require the fulfillment of certain conditions set forth in grant agreements, and may be regularly monitored and reviewed by grantors, both during and after the programs. Failure to satisfy the requirements of contract agreements could result in disallowed costs and return of funds to grantors.

Finding Details

Finding 2022-001
2022-001 Significient Deficiency in Internal Control over compliance with Reporting Requirements Programs: U.S. Department of Housing and Urban Development passed through City of Houston, Community Development Block Grant, ALN: 14.218, Award No: 4600016414-2021-00911 Criteria: Section 200.512 of the Uniform Guidance, Report Submission, requires that the audit must be completed and the data collection form and audit reporting package be submitted to the Federal Audit Clearinghouse with the earlier of 30 calendar days after receipt of the auditor's report, or nine months after the end of the audit fiscal period. Condition: The Organization did not comply with the reporting requirements for ALN 14.218, and did not timely submittd the data collection form and reporting package to the Federal Audit Clearinghouse for the year ended December 31, 2022. Cause: The Organization experienced extended disruptions in its fiscal department due to COVID-19 pandemic and other health challenges, resulting in the late completion of financial records and readiness for audit activities. In addition, the Organization lacked adequate resources and management supervision for the grant program. Effect: Non-compliance with a compliance requirement of the Uniform Guidance that is relevant for timely review of the Organization's performance in the federal program. Questioned Costs: No questioned costs were noted for non compliance with the reporting compliance requirements. View of Responsible Officers and Planned Corrective Action: Management agres with the finding. See correction action plan.
Finding 2022-002
2022-001 Significient Deficiency in Internal Control over compliance with Reporting Requirements Programs: U.S. Department of Treasury Community Development Financial Institutions, ALN 21.024, Award No: 21RRP057157 Criteria: Section 200.512 of the Uniform Guidance, Report Submission, requires that the audit must be completed and the data collection form and audit reporting package be submitted to the Federal Audit Clearinghouse with the earlier of 30 calendar days after receipt of the auditor's report, or nine months after the end of the audit fiscal period. Condition: The Organization did not comply with the reporting requirements for ALN 21.024, and did not timely submittd the data collection form and reporting package to the Federal Audit Clearinghouse for the year ended December 31, 2022. Cause: The Organization experienced extended disruptions in its fiscal department due to COVID-19 pandemic and other health challenges, resulting in the late completion of financial records and readiness for audit activities. In addition, the Organization lacked adequate resources and management supervision for the grant program. Effect: Non-compliance with a compliance requirement of the Uniform Guidance that is relevant for timely review of the Organization's performance in the federal program. Questioned Costs: No questioned costs were noted for non compliance with the reporting compliance requirements. View of Responsible Officers and Planned Corrective Action: Management agres with the finding. See correction action plan.
Finding 2022-003
2022-001 Significient Deficiency in Internal Control over compliance with Reporting Requirements Programs: Coronavirus Relief Program passed through City of Houston, ALN 21.019 Criteria: Section 200.512 of the Uniform Guidance, Report Submission, requires that the audit must be completed and the data collection form and audit reporting package be submitted to the Federal Audit Clearinghouse with the earlier of 30 calendar days after receipt of the auditor's report, or nine months after the end of the audit fiscal period. Condition: The Organization did not comply with the reporting requirements for ALN 21.019, and did not timely submittd the data collection form and reporting package to the Federal Audit Clearinghouse for the year ended December 31, 2022. Cause: The Organization experienced extended disruptions in its fiscal department due to COVID-19 pandemic and other health challenges, resulting in the late completion of financial records and readiness for audit activities. In addition, the Organization lacked adequate resources and management supervision for the grant program. Effect: Non-compliance with a compliance requirement of the Uniform Guidance that is relevant for timely review of the Organization's performance in the federal program. Questioned Costs: No questioned costs were noted for non compliance with the reporting compliance requirements. View of Responsible Officers and Planned Corrective Action: Management agres with the finding. See correction action plan.
Finding 2022-001
2022-001 Significient Deficiency in Internal Control over compliance with Reporting Requirements Programs: U.S. Department of Housing and Urban Development passed through City of Houston, Community Development Block Grant, ALN: 14.218, Award No: 4600016414-2021-00911 Criteria: Section 200.512 of the Uniform Guidance, Report Submission, requires that the audit must be completed and the data collection form and audit reporting package be submitted to the Federal Audit Clearinghouse with the earlier of 30 calendar days after receipt of the auditor's report, or nine months after the end of the audit fiscal period. Condition: The Organization did not comply with the reporting requirements for ALN 14.218, and did not timely submittd the data collection form and reporting package to the Federal Audit Clearinghouse for the year ended December 31, 2022. Cause: The Organization experienced extended disruptions in its fiscal department due to COVID-19 pandemic and other health challenges, resulting in the late completion of financial records and readiness for audit activities. In addition, the Organization lacked adequate resources and management supervision for the grant program. Effect: Non-compliance with a compliance requirement of the Uniform Guidance that is relevant for timely review of the Organization's performance in the federal program. Questioned Costs: No questioned costs were noted for non compliance with the reporting compliance requirements. View of Responsible Officers and Planned Corrective Action: Management agres with the finding. See correction action plan.
Finding 2022-002
2022-001 Significient Deficiency in Internal Control over compliance with Reporting Requirements Programs: U.S. Department of Treasury Community Development Financial Institutions, ALN 21.024, Award No: 21RRP057157 Criteria: Section 200.512 of the Uniform Guidance, Report Submission, requires that the audit must be completed and the data collection form and audit reporting package be submitted to the Federal Audit Clearinghouse with the earlier of 30 calendar days after receipt of the auditor's report, or nine months after the end of the audit fiscal period. Condition: The Organization did not comply with the reporting requirements for ALN 21.024, and did not timely submittd the data collection form and reporting package to the Federal Audit Clearinghouse for the year ended December 31, 2022. Cause: The Organization experienced extended disruptions in its fiscal department due to COVID-19 pandemic and other health challenges, resulting in the late completion of financial records and readiness for audit activities. In addition, the Organization lacked adequate resources and management supervision for the grant program. Effect: Non-compliance with a compliance requirement of the Uniform Guidance that is relevant for timely review of the Organization's performance in the federal program. Questioned Costs: No questioned costs were noted for non compliance with the reporting compliance requirements. View of Responsible Officers and Planned Corrective Action: Management agres with the finding. See correction action plan.
Finding 2022-003
2022-001 Significient Deficiency in Internal Control over compliance with Reporting Requirements Programs: Coronavirus Relief Program passed through City of Houston, ALN 21.019 Criteria: Section 200.512 of the Uniform Guidance, Report Submission, requires that the audit must be completed and the data collection form and audit reporting package be submitted to the Federal Audit Clearinghouse with the earlier of 30 calendar days after receipt of the auditor's report, or nine months after the end of the audit fiscal period. Condition: The Organization did not comply with the reporting requirements for ALN 21.019, and did not timely submittd the data collection form and reporting package to the Federal Audit Clearinghouse for the year ended December 31, 2022. Cause: The Organization experienced extended disruptions in its fiscal department due to COVID-19 pandemic and other health challenges, resulting in the late completion of financial records and readiness for audit activities. In addition, the Organization lacked adequate resources and management supervision for the grant program. Effect: Non-compliance with a compliance requirement of the Uniform Guidance that is relevant for timely review of the Organization's performance in the federal program. Questioned Costs: No questioned costs were noted for non compliance with the reporting compliance requirements. View of Responsible Officers and Planned Corrective Action: Management agres with the finding. See correction action plan.